Recess advertised by paying consumers on Venmo to share its post
On Black Friday, Benjamin Witte, founder and CEO of CBD-infused beverage brand Recess, promoted his product on Instagram. The problem was that Instagram prohibits brands from advertising products that contain CBD.
“Any products that contain ingestible hemp and/or CBD are not currently allowed, nor any products that allude to psychoactive effects,” a spokesperson at Instagram told Adweek.
While some laws, policies, and cultural norms pose an obstacle for some marketers, Witte saw an opportunity. The fact that CBD products are developing at a faster pace means creative approaches to marketing can slip through the cracks—unless someone spots them.
On the morning of Nov. 29, Recess sent an email to its mailing list and published a post on its Instagram asking readers to share the post on their Instagram stories. If people provided a screenshot as proof, Recess promised to pay them $3 via Venmo.
“We can’t do paid ads because of hemp regulation so instead of paying Instagram to run ads we want to pay YOU,” read the post, punctuated by nearly 50 emojis.
Recess put aside $3,000 for the one-day promotion. By around 6 p.m. EST, it was all gone, according to Witte.
Later that night, an anonymous person reported Recess’ post and Instagram took it down. The company also ran into daily payment limits on Venmo and had to dispense the funds throughout the weekend.
“Everything we do at Recess is about generating earned media, word-of-mouth and buzz,” Witte told Adweek. “The whole marketing strategy of Recess has been to create content and experiences, both digital and physical, that our community wants to engage with deeply and share with their friends.”
Recess, which offers CBD-infused sparkling water in flavors such as blackberry chai and peach ginger, is part of a booming industry. Numbers from BDS Analytics, which tracks the cannabis industry, forecasts that general retail sales of CBD in the U.S. will leap from $624 million in 2018 to $12.6 billion in 2024. That’s an increase of over 1,900%, and the statistic doesn’t even include sales from dispensaries and pharmacies.
Market research firm Morning Consult published survey data last June showing that while 87% of U.S. adults have seen, read or heard something about CBD, only 24% admit they have tried a product, such as chocolate or skincare, that contains the compound. In other words, there’s room to grow.
Then again, CBD’s sprint ahead might encounter hurdles if the Food and Drug Administration doesn’t approve of the substance as a food additive. In late November, for instance, the FDA stated that due to a lack of scientific evidence, the agency couldn’t conclude that CBD is safe for consumers, saying, “Many unanswered questions and data gaps about CBD toxicity exist, and some of the available data raise serious concerns about potential harm from CBD.” The FDA also sent warning letters to 15 companies for selling CBD products in an illegal manner.
Witte, whose company was not a target of the FDA review, said the federal move is more about flushing out “bad actors” that are misleading potential customers with exaggerated claims in the quickly evolving CBD industry.
Another challenge companies like Witte’s face is the ban on advertising through more traditional means. But Witte doesn’t seem to mind. If anything, his Black Friday stunt points to the gray area between what’s considered official advertising and what’s not and the difference between a bona fide influencer and a regular user who accepts cash to influence others.
“Even if I could do paid advertising on Instagram, I’d still suspect we’d do very little of it,” said Witte, who explained he prefers allocating dollars toward content and experiences that people find so authentic that they feel compelled to share them with their friends. Someone telling someone else about a product is a thousand times more valuable than a paid ad conveying the same information, he added.